Mike Dedunovich, the founder of BelTransSputnik and Infinium companies, shared his experience of promoting a new high-tech product, which was not previously in the line of transport and logistics services.
We have been engaged in GPS monitoring of vehicle traffic for a long time. This technology was our basic low-cost service, although we understood that it had much more capabilities. And clients soon needed us to not only collect and display data – they began to need an optimal transport management system that reduces transport expenses. And continuously monitors all deviations of drivers from optimal tasks. Only an automated system could cope with such a request. We had to create a complex product and learn how to sell it. In this article I will tell you step by step how we achieved this.
Solution: develop a complex and more valuable proposal for the client.
GPS monitoring gave us data, but did not interpret it. Clients had to do a lot of things manually. For example, based on our numbers, logisticians knew where the car was and what the fuel level was in the tank. But this information is a trifle in comparison with a service that would allow for more rational use of the vehicle fleet, and thereby save money. You may simply not need a quarter of the cars. After all, if you use artificial intelligence, you can load cars more densely, create optimal routes and automatically monitor their implementation. Demanding clients also pushed for development. One day, a request came for data from 3 years ago: for the trial, a minute-by-minute breakdown of the movement of the car was needed. We decided to accumulate GPS monitoring data on servers. True, they soon realized: this whole “information web” without analytics is not so valuable. But an analysis of the history of transport movements over 20 years is able to calculate trends in logistics for 2-3 years in advance and predict transport flows. So we came up with a new product – an AI-based transport management system. The service has changed our entire organization from the inside out. After all, the team is used to selling a basic product. And here she was already dealing with difficult decisions.
Solution: to create a parallel department – separatly from the main team.
The revolutionary turn for us took place exactly ten years ago. We began to create a logistics optimization system that takes into account many variables and sees patterns. Mathematicians, algorithmists, IT architects and business analysts were invited. They organized a “secret room”; people who were involved in data analysis and the architecture of future software gathered there. Why did they do this? IT specialists who have been working with us for a long time could see in innovative developments a danger for basic products and themselves personally. We didn’t want to scare or offend them. They are still valuable to the company.
Solution: launching a sub-brand and promoting a complex product.
Having served the transportation of thousands of companies, we began to impersonally compare them with each other. And we saw common features that lead clients to success. From a “nurse” measuring blood pressure, we have become a “doctor” who prescribes prescriptions and achieves recovery. We created a product with premium capabilities that needed to be positioned correctly. Our new software helped manage logistics costs and guaranteed customers savings of 30 percent. We launched the system for free rental. Test users helped add functionality with their requests. Normal practice for an IT product: everything is free until it brings profit to the client. Only eight years later we were ready for commercialization. The next step was the launch of a sub-brand – Infinium. The project began to grow rapidly: from three employees and a couple of clients in 2013 to 60 people in the team and 500 clients now. We achieved this growth thanks to deep immersion in our clients’ tasks. We managed to create a solution that can provide returns to clients: 1:50 for every ruble invested in our system, i.e. Infinium software product allows you to reduce about 30% of distribution logistics costs.
Solution: to jump over bureaucratic barriers to the level of top managers who are ready to speak the language of numbers.
Our clients’ logisticians were often afraid of innovation. They were worried that technology would crush them. We convinced them: “You are the ones who will be helped the most by the system. Only you know for which of the clients being a couple of minutes late is not critical. The AI will calculate everything, and your task is to manually “move” several deliveries, which ultimately will allow you to avoid using unnecessary transport”. But logisticians and heads of transport services sometimes perceived a 30% reduction in the vehicle fleet as a demotion. Therefore, we first went to top management. They are definitely more interested in business benefits than others. Although not everything was smooth here: at the begining it’s difficult for the manager to believe that he still had impressive reserves.
Solution: take on the labor-intensive service rather than just offer software.
Our development is not cheap. In addition, the issue of implementation remains. Most of our competitors were hungry for quick profits. According to their version, the client himself had to become interested in their service, implement it himself and regularly pay money for the right to use it. However, the client has no time to do this. He has a continuous business process that generates profit. It’s not profitable to break something. The customer needs a team that will quietly implement the system while maintaining working processes. Only after this the company will painlessly switch the old process to the new one. Therefore, as a competitive advantage, we chose labor-intensive service and support at all stages.
We decided: if you take money only for software and do not solve related issues, the value of the technology will be minimal.
What does the service consist of? Financial and logistics audit is the most effective way to prove benefits to a company. It helps to understand the client’s pain points and proves the savings numbers that we voice in the commercial proposal. We stipulate in the contract that we are responsible for the accuracy of the audit. Therefore, we are very interested in correct data.
Help with implementation. If you make an airplane and provide customers with a thousand-page instruction manual, the vast majority will not fly, but will hide inside from the rain. To fly, at a minimum, you need a pilot instructor. So it is with our system. Implementation assistance is primarily stress-free training and support for employees. First we help them do their job and train them at the same time, and then we take the “flight” test. Hot consulting after launch. The client needs quick responses to all requests. Because the client’s delivery, as always, is “on fire”, and his image is at stake.
Results
Now, out of 300 large companies that organize delivery in Belarus, 200 work with us. Basically, everything worked out thanks to word of mouth. Clients from Russia, Kazakhstan, Poland, the Baltic countries, and the Middle East connect to us. And all this so far without foreign offices. Although we are preparing for their opening. Logistics problems are common to most markets. For example, in the UK, artificial intelligence has not been introduced into routing.
“The main insight for me remains the following: you need to bring a product to the market quickly, before weaker products flood it. Otherwise, you will have to spend a lot of time proving your superiority. The sooner you announce the product, the sooner you will have many satisfied customers who will spread your fame”.